No profits, no problem: the joys and hardships of running an independent game store
Pixels is an independent video game store in Ames, Iowa. It is literally a brick and mortar storefront, with tinted black windows and a fairly plain, unassuming sign hung above. Such physical stores that aren’t part of a national chain are a rarity; a dying breed in an age of DLC and digital distribution. I talked to Aaron McMahon, owner and self-proclaimed “grandmaster” of Pixels, in hopes he could shed light on what it’s like to be the little guy up against giant of retail and the Internet.
Video games: serious business
McMahon studied business at University, before going on to manage a local Gamers store for four years. Using the money he earned from his time there, McMahon amassed an impressive personal collection, which included more than 600 SNES games. Something was off, though. McMahon wasn’t happy running a local branch of a corporate franchise.
“I took it upon myself to open up a video game store that was more about games than the business,” McMahon told the Penny Arcade Report. “It’s almost more of a hobby than cash maker. We like to do things that are fun. We don’t take priority on getting people to reserve things, for example.”
McMahon took out 200 games from his personal SNES collection, 300 from his PS2 collection, and used Craigslist to secure a variety of games, consoles, and accessories for other systems. He took out several small business loans and bought the Pixels home space, just across the street from a U.S. Bank drive-up teller, and sandwiched between a Domino’s Pizza and local Indian restaurant. It’s just a block from the Iowa State University campus as well.
Inside, there are several glass cabinets full of new games, while rows of used copies fill the majority of space. In the corner, there is a couch and small television with a Genesis and SNES for customers to play, free of charge. In the back is a selection of arcade cabinets, along with a scoreboard recording the all-time high scores.
“The arcade is a big deal. When I was first opening up, I spent a lot of money on the arcade, and people were like, ‘It’s a waste of money.’ I know it’s not going to make money, but it’s going to bring people into the store, and it’s nice to have,” McMahon said. “People like the atmosphere.”
The high scores aren’t just for show; beat them, and you win store credit. The longer a score goes unchallenged, the higher the prize becomes. McMahon himself holds the high score for Super Mario Bros. at 2,756,950, with a prize of $50 in store credit for anyone who can take him down.
“It’s pretty much impossible to beat,” he said. This is the Wild West, but with revolvers substituted by joysticks, and McMahon is Billy The Kid.
Your games are not yours
EA Labels President Frank Gibeau told Gamesindustry International earlier this year that the company would eventually abandon the retail market in favor of digital distribution. “We’re going to be a 100% digital company, period. It’s going to be there some day. It’s inevitable,” he said.
A survey by the NPD Group, also released this year, showed that just more than one-third of gamers would choose to purchase a game digitally, if sold at the same price as a physical copy. This was a 10% increase from 2011.
Everywhere McMahon looks, the Internet is staring back. Steam and Amazon are household names. DLC and online passes have gamers more reliant on their Internet than ever. Diablo III, one of 2012’s biggest releases, can’t even be played while offline. What chance does a local business like Pixels have?
“I buy a lot of stuff off Amazon myself, but it’s about the environment; being able to come in and talk to people about the games and play games,” McMahon said. “We know a lot of the customers by name. We try to get them on a name-to-name basis. People come in here, sometimes to just hang out. Even if you’re not planning on buying anything, people stop in.”
It’s a lovely sentiment, but warm feelings don’t pay the bills. I asked McMahon if the increasing trend towards digital distribution was something he considered before opening Pixels. “It won’t be for awhile, and the store can start turning a profit before that, and maybe stay afloat with the older stuff. It’s hard to tell. We’ll wait and see what happens with the next generation, the next Xbox and PlayStation. See where they take things.”
McMahon said that if the next PlayStation and Xbox keep the physical games model, it would “guarantee” another five to six years of existence. That’s the same amount of time it will take Pixels to become profitable, according to McMahon’s estimates. Although it will take some time for Pixels to get off the ground and running, McMahon doesn’t seem worried, and he shouldn’t be: McMahon is a single guy without kids, and cost of living is lower in Iowa than the national average. Besides, Pixels is, as McMahon put it, more of a hobby than cash cow.
“Hopefully we have a few more good years, but I think eventually you’ll see everything go digital. I don’t think a stand-alone video game store will make it for too long. A store that caters to the retro can maybe stay around longer, but if you’re phasing out [games] like GameStop, they already got rid of GameCube and Xbox…” McMahon paused. “Yeah. It’s very sad. Thinking of everything one day being digital? I can’t even picture that. I can’t stand it.”
McMahon spoke not just as a business owner, but a gamer. He’s not a fan of the temporary nature of downloads. “With a physical game, you own that, and you know you can always play it.”
If you love physical items, the temporary nature of modern games is a depressing thought. All those multiplayer map packs, all those single-player add-ons, and indeed, even full-length games available for download might have an expiration date. They only exist as long as providers give their blessing.
As Jeff Marchiafava wrote in April’s Game Informer, “Once that is gone, that content (if it’s not already loaded on your console) will be gone forever. We won’t cry if that means losing access to our horse armor in Oblivion a few years from now, but some missing content will prove more detrimental to the overall experience. Late last year, Rocksteady was criticized for locking the Catwoman chapters of Batman: Arkham City, which intertwine with the Caped Crusader’s own narrative, behind a hefty DLC download.”
“Ultimately, players who buy the game new and have access to the Internet don’t think much about the inconvenience of downloading the extra content. But once Xbox Live and PSN support are no longer offered for the 360 and PS3, a piece of Arkham City’s adventure will be permanently lost.”
A cool sensation
Another problem for Pixels is their low position on the distributor totem pole. You may recall my first reported stop by the store, when we tried to find out if you could find a Wii U on store shelves. Pixels hadn’t been allotted a single unit, and at time of writing, they still haven’t gotten in a shipment. Distributors want to send games where they know they’ll be sold, and local stores just can’t compete with the big-name retail outlets. If a customer wants something new, Pixels may not have it, or even have the ability to get it.
McMahon doesn’t worry much about all of that, though. Although he wouldn’t give specific numbers, it’s used games, not new, that make up the majority of the store’s income. The future may not be particularly bright, but this is a hobby as much as anything, and McMahon has no regrets. His favorite part of Pixels is getting to talk about games all day, while suggesting a few hidden classics to those who come through his doors.
“With the old games, I always try to sell people Cool Spot. It’s one of my favorites,” he explained. “People are like, ‘What’s a good Genesis or Super Nintendo game?’ I always tell them, ‘Get Cool Spot.’”
Hearing the name, I was inspired to dig out my copy when I got home. I pulled it out of its plastic storage container, gave a quick breath across the slot, and powered it up. It felt good.